Designers of credit scoring models review a set of consumers - often over a million. The credit profiles of the consumers are examined to identify common variables they exhibited. The designers then build statistical models that assign weights to each variable, and these variables are combined to create a credit score.

Models for specific types of loans, such as auto or mortgage, more closely consider consumer payment statistics related to these loans. Model builders strive to identify the best set of variables from a consumers past credit history that most effectively predict future credit behavior.

The three major credit bureaus, Experian, Equifax, and Trans Union all use their own unique scoring models. Most lenders will look at all three of your credit bureau reports and scores, commonly referred to as a tri-merge report. The difference between the three credit bureau scores can be significant due to the different scoring models that each bureau uses.

Most lenders will use the middle of the three credit bureau credit scores when reviewing your loan application file. There are some exceptions. If you would like more information about the alternative programs, please call me at .

Each credit repository, Equifax, Experian, and TransUnion, all update their credit scoring models every now and then. Just like with a computer and its operating system such as Windows 95, Windows 2000, Windows XP, etc... the credit bureaus update their technology and their scoring models as well. Not all lenders use the same models for each different credit bureau. Some lenders use older models because they are usually cheaper while others use the most updated model. This is one reason why there are sometimes discrepancies or variances from lender to lender on actual credit scores.